If technology has done one thing in the personal lines world of insurance it is to increase the competitive nature among carriers. Through advances in automated underwriting and easier connectivity through the Internet, insurers of all sizes are going after the same customers.

"Carriers are trying to understand what is in the hearts and minds of the consumers they are trying to attract, how they can differentiate themselves in the marketplace, and how the consumers of the future want to be served and interact with carriers," says Rebecca Amoroso, vice chairman and U.S. insurance industry leader for Deloitte

Deloitte recently published a report on the subject: "The Voice of the Personal Lines Consumer: Buyers in the Driver's Seat."

Amoroso believes that technology continues to change the way consumers conduct business, which has had an impact on how carriers, in turn, sell insurance.

"More consumers are requiring carriers to communicate 24/7 so carriers need to get their arms around how to have their service consistent with whatever channel is being used by the consumer," she says.

The Deloitte study found most people are satisfied with their agents, even though the agency channel has been shrinking.

"You are seeing more direct carriers and more companies with multiple channels," says Amoroso. "I think this trend will continue to some degree, but based on what we've learned in the survey, wedon't see the agency force going away."

Amoroso maintains there always will be a need for agents and the report indicates customers are satisfied with the level of service they have been receiving.

"Forty percent of those surveyed have stayed with their [personal lines] agent for more than 10 years and that's a significant number," she says.

Deloitte examined what it would take for a direct buyer to consider alternate channels and Amoroso explains there was a 40 percent likelihood that someone purchasing a homeowners policy would consider buying from an agent the next time around. Only 30 percent of those buying personal auto policies said they would consider using an agent for their next insurance purchase.

"That shows there are some opportunities," says Amoroso.

Going in the other direction, approximately 20 percent of personal lines shoppers who currently use an agency channel would prefer to buy direct the next time.

Amoroso believes shoppers are more apt to go direct when purchasing personal auto policies.

"When purchasing a homeowners policy, things are more complex," she says. "A higher percentage of those people would look for an agent to help them."

The Deloitte survey showed the public is fairly satisfied with the price they are paying for insurance and for the service they receive from both the agency and carrier, which means there is no compelling reason for customers to go looking at competitors—at least until a claim is filed.

"When customers do change, most times it is because they've had a bad claims experience," says Amoroso.

But even then, Deloitte reports only one-third of those suffering through a bad claims experience move to another carrier for that reason.

One area of movement involves the age factor. Amoroso explains the under-35 consumer is more apt to look at changing carriers every year at renewal.

"They are less loyal than some of their older counterparts," she says.

Deloitte looked at telematics in the study and respondents reported they would use the new underwriting technology it if they got a serious price break, but there were surprises in terms of which age group was more likely to try telematics.

"Anything that touches technology, the younger folks are more inclined to use rather than the older folks," says Amoroso. "But there was a clear difference of preference for telematics. Older folks were more excited about bringing it on than younger folks. A lot of parents with young drivers are more inclined to want to use telematics to monitor the driving habits of their child. That was the only technology-driven item that the younger consumers were not terribly excited about."

One of the main themes of the Deloitte study is carriers need to attract customers while they're young and if you can keep those young customers happy they are likely to stay.

"If you want to attract new consumers coming into the picture you need to be on top of the technology they will find useful," says Amoroso.

Mobile apps matter for the younger buyer, according to Amoroso, along with ease of navigation, a carrier's website, ease of communication, and the methods or channels to communicate.

"These are going to be critical to attract and retain the younger consumers and I think they will be a catalyst for older generations," she says. "Companies need to be on top of investments in technology to attract customers and differentiate their organization to the younger buyer."

Special Reports /

Personal Lines Insurers Balance Channel Activity & Technology to Attract & Retain Customers

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